Calculating Pay Inequity

How big is the gender gap in pay between men and women? The answer, as my print column this week explains, depends on how you measure it.

The most common statement of the gap in the U.S. is that women earn 77 cents for every dollar that men do. President Barack Obama referred to that figure on the campaign trail and since taking office. That’s the basis for the math behind Equal Pay Day on April 20, which marks the day by which women have caught up to what men earned last year. However, economists find a smaller gap after adjusting for various factors.

“It’s fair to say the gender gap would be less than 10 percentage points if you had better data and could make all the reasonable adjustments,” said Casey Mulligan, an economist at the University of Chicago.